Employee Key Performance Indicators
Employee Key Performance Indicators
How and Why to Choose the Correct Key Performance Indicators for Your Employees
Employee performance is a hot topic amongst managers. The question to answer is how well an employee performs? The next question is whether the actions of the employee are relevant to reaching the company goals?
Key performance indicators measure and link the enterprise’s vision with the individual’s performance. Not knowing how well the employees perform and whether their actions contribute towards reaching the company’s strategic goals means that management is ignoring the most important resource and method in which to control it for optimal business performance.
Your company should be envisioned like a pyramid. The vision and goals of your company are at the top of the pyramid, while your performance/action are at the bottom of the pyramid. The middle of the pyramid consists of your key performance indicators. These KPIs are important, as they are the metrics which connect the top strategy/goals with the objectives of each department, as well as the individual actions of employees within those departments.
These key performance indicators are thus the metrics to determine how the individual employee’s actions perform within the greater scope of the organisation.
You want to assess whether the actions of the employees are aligned with the enterprise’s strategy. This is how KPIs are used for performance management. By using KPIs to measure employee actions and goals, it is possible to establish a direct connection between the different critical key factors needed for reaching the goals in line with the company strategy. This helps to ensure that the employees in the team do what they are supposed to do, and how and what they do are linked to the enterprise’s success.
An important part of business performance management is to set goals. This includes goals for the individual employees, the different departments and the company as a whole. Each individual goal must be aligned with the department’s goals, and the latter with the overall company strategy. Measuring how well aligned the goals are and what the progress towards the goals is help to ensure that goals are met. Every employee’s goal must be linked to an important KPI.
To set KPIs for employees, you need to understand the context. For this, you need to determine what your future vision and strategy are, and how they will be accomplished? Also answer questions such as which factors are critical to the success of the company?
The next step is to define the various employee key performance indicators. Decide how many KPIs to use and how often measurement should take place. Also determine who must take accountability for each metric. Consider how complex each measurement should be and what the benchmark for each must be.
Deciding which KPIs to use is important. Don’t fall into the trap of using general KPIs. You need to use KPIs that are relevant to your particular industry. Measuring what is irrelevant is a waste of time and resources. Keep in mind that the KPIs you select must match both the industry in which you operate and the strategy of your company.
Understand that KPIs are metrics that measure your enterprise’s performance with regards to a specific goal and also apply to the individual employee. Select between four and eleven KPIs, rather than having a long list.
The Importance of Selecting the Right Software Solution
With many KPI software solutions on the market, you may be tempted to choose a solution based on price or simply because it looks impressive. However, it is imperative to select one that fits in with your particular industry, streamlines processes rather than complicates such, and enables you to regularly measure performance, rather than doing so on a quarterly or annual basis.
The truth is that employee performance should not only be measured once a year. The managers tend to focus on the last quarter or even last few weeks of performance, rather than the performance throughout the year.
Regular measurement makes it possible to address problem areas before the company performance suffers because of a lack of performance by an employee. In addition, an employee can become discouraged because the manager doing the performance appraisal only remembers the last three major actions that took place, rather than the general performance and achievements of the employee.
KPI Management Solutions offers you the solution to choose the correct KPIs, measure them regularly and measure performance as aligned with your company’s goals.
